RG Business December 2018

INDUSTRY

ON LEADERSHIP

A LIVING WAGE

The business in games

Sir John Swan talks to RG Mags

Can a rising tide really lift all boats?

P. 24

P. 26

P. 32

December 2018 | RG BUSINESS

CONTENTS

COVER STORY 26

INNOVATION IN LEADERSHIP Sir John Swan talks to RG Business about what leadership in Bermuda is, and what we should be doing to move forward.

DEPARTMENTS 5

IN PROFILE

16 TOP TREADS

Small Business Awards Winners

The most powerful comes to us

Share their success

BY IAN HIND

A review of the Renault Clio IV

BY KRISTEN SCOTT NDIAYE

7 ACCOUNTING

18 INSURANCE An internet minute

10 Trick questions

Bermuda’s Protection Act

To ensure your accountant is on point

BY GEORGE THOMAS

BY JOHANNES EULEN

8 BANKING A mortgage is a serious business Thoughts on the Throne Speech

BY JOHANNES EULEN

9 FINANCE To give or not to give The benefits of year-end bonus

BY DUNCAN HALL

20 RECRUITMENT It’s who you know How to network in Bermuda

BY KEITH SZMIEREK

22 SMALL BUSINESS Operational Business Marrying passion and know-how

BY JONATHAN KENT

24 INDUSTRY Bermuda’s Games Industry

10 TRAVEL Keep it personal When is it appropriate to bring your family on a business trip?

BY ANNABEL COOPER

12 REAL ESTATE Keep it personal on business When to bring the family

BY BUDDY REGO

A business opportunity?

BY KRISTEN SCOTT NDIAYE

29 INDUSTRY Hemingways, Cuba in Bermuda A story of how Bacardi came to the island

BY KRISTEN SCOTT NDIAYE

32 LEGAL The Living Wage

14 TECH Plug & Play

Can a rising tide really shift all boats?

BY JOHN HINDNESS

7 Gadgets to take you into the New Year

BY RAJAN SIMONS DECEMBER 2018 RG BUSINESS

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BUSINESSSPOTLIGHT MAGSBDA

READ:

rgmags.com Content Manager Kristen Scott Ndiaye

Learning How to Learn

Publications & Product Development Manager Carlene Spencer-Darrell

AUTHOR: BARBARA OAKLEY, PHD, TERRENCE SEJNOWSKI, PHD AND

Creative Director Nikeisha Burrows

ALISTAIR MCCONVILLE

Marketing Manager Christina Sgobba

From the creator of one of the world’s most popular on-line courses (of the same name), this book, written for teenagers, teaches the inner workings of neural processes in a digestible way that even adults should be interested in. This book gives a systematic approach to effective learning – advocating for re-wiring our brain from the way that we’ve been taught to learn, to a way that helps us to pick up any topic. Read a full review at rgmags.com/business.

CONTRIBUTORS Duncan Hall Johannes Eulen Annabel Cooper Buddy Rego Ian Hind George Thomas Keith Szmierek Jonathan Kent John Hindess Raymond Hainey ADVERTISING SALES & ADMINISTRATION sales@royalgazette.com

Advertising Solutions Specialist Shawn-Nae Cann Advertising Solutions Specialist Andre Bolotenko Advertising Account Executive Marguerita Carter Administrative Sales Support Margaret Mitchell ART & DESIGN Senior Digital Graphic Designer Terrina Nolan Senior Graphic Designer Christina White Senior Graphic Designer Byron Muhammad Graphic Designer Zaire Quenette-Lowe

PHOTOGRAPHY Acting Chief Photographer Akil Simmons Photo Journalist Blaire Simmons RGMAGS.COM Digital Content Specialist Rajan Simons Senior Digital Graphic Designer Terrina Nolan Web Developer & Template Manager Joseph To BUSINESS Chief Executive Officer Jonathan Howes Chief Financial Officer Cameron Poland Commercial Director Michael Grier

SPECIAL FEATURES EDITORIAL

PUBLISHED BY The Bermuda Press [Holdings] Ltd.

Digital Content Specialist Rajan Simons

PRINTED BY Bermuda Press Ltd. RG Mags Bda is a series of Feature & Supplement products provided by The Royal Gazette.

Established 1828; Incorporating The Colonist and Daily News (Established 1866). Member of the Newspaper Association of America. The Royal Gazette Ltd, a subsidiary company of Bermuda Press (Holdings) Ltd. BPH incorporated in Bermuda, publishers and printers of The Royal Gazette. The Royal Gazette Ltd’s Electronic Edition is published daily at www. royalgazette.com

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RG BUSINESS DECEMBER 2018

CONTRIBUTE: Bermuda Island Games @bdaislandgames Bermuda Island Games is the first Bermudian mobile game development company, dedicated to designing games that celebrate Bermuda. Their goal is to promote the island in the most entertaining and educational way possible, through games that portray our culture. Read our story on the games industry in this issue and connect on social media for more details on to get behind this burgeoning industry.

PLAY:

Bermuda Festival of Performing Arts JANUARY 19 – MARCH 19 For two months at the beginning of each year Bermuda becomes an international hub for cultural exchange and artistic growth. Performing artists from a rangof disciplines come from around the globe to present a schedule of events designed to appeal to a wide and diverse audience.

Gift tickets to a dynamic show, or spend time with clients and colleagues.

The Bermuda Festival is the perfect place to play. www.bermudafestival.org

TOP IN PROFILE TREADS

The 2018 Small Business awards winners

BY KRISTEN SCOTT NDIAYE PHOTOGRAPHY: AKIL SIMMONS “The Awards should continue as it will help increase spending, employment and engagement within the community and the business sector. Organic relationships are created while the small business is on the rise to establish itself. By the community being involved with choosing the businesses their love gives buy-in to sustainable customer interactions and business practices.”

–Surlena Smith, PondaPits, BEDC Client of the Year 2018 ENTREPRENEUR OF THE YEAR Anderica Gilbert Bermuda Dental Studio

VENDOR OF THE YEAR Gina Thompson Sniggles Face & Painting

Bermuda Dental Studio specialises in the manufacturing of custom dental devices locally, by prescription from a dentist such as dentures, retainers, night and sports guards. Anderica has in mind to create training and career opportunities for other dental professionals that want to get into the field.

Sniggles Face & Painting offers face and body painting, fun castle rentals, party planning and more to do with putting on the most memorable event. “In the near future, I would like to see my business doing live painting in hotels or any other entertaining events.”

PEOPLE’S CHOICE Malisa Swan Bermuda Cupcake Company In its eighth year, Bermuda Cupcake Company, is clearly the people’s choice. The next step for Bermuda Cupcake Company is to get a larger commercial place and hire a fun creative team.

BEDC CLIENT OF THE YEAR Surlena Smith Ponda Pits PondaPits creates organic personal care products with our health and environment in mind. Giving your body a vacation from toxins with scents inspired by Bermuda. “With the help of BEDC, I was able to transition from a corporate cubicle to my own small business cubicle, and several locations.”

Other business categories: NEW BUSINESS OF THE YEAR Catarina Rocha Glamping on the Rock, LLC Glamping On De Rock is a luxury pop-up camping experience allowing visitors and locals to connect with Bermuda’s authentic nature and culture.

“As we grow our business our second phase is providing a new hospitality business, overnight glamping accommodations.”

MOST ENTERPRISING YOUNG ENTREPRENEUR Mia Williams Grant The Burning Bean The Burning Bean creates artisan soy candles, hand poured in Bermuda

DECEMBER 2018 RG BUSINESS

5

ACCOUNTING

Ten trick questions to ask

To ensure your accountant is on point

BY JOHANNES EULEN Let us say that you are a new business owner, or are running an existing business and are becoming dissatisfied with the work of your existing accountant.

You do some research; ask around for recommendations; and decide to interview a couple of potential candidates. What can you ask them that gives you a reasonable chance of determining the reality behind the appearance of sober and competent professionalism?

May we suggest using the following 10 questions as part of the interview when you sit down in their offices (always go to them!)

it to consume time they should be spending upon you and their other clients.

3

How much of a discount for prompt payment of their fees in cash?

If they are happy to be paid in used bills, this is not a good sign.

4

PLP or OBA? This is not a political question.

You don’t care what the answer is. It is simply intended to keep them off-balance.

How important do they think IFRS 9 will be for your [retail/engineering/service] business?

This sorts the poseurs from the serious players. It’s completely irrelevant to anything other than a major financial business outside the US.

2

5

1

Any hobbies (such as semi-professional body-building)?

Accountants often list “seasoned toper” amongst “Other Information” on their professional CVs. This is a signal that they are familiar with Bermudian habits. However, whatever it is, you do not want

Have any of their existing clients ever had a problem with the Foreign Corrupt Practices Act? Tricky one this. If they become irate and bluster “Of course not!” it could be a case of “[The lady/man] doth protest too much, methinks”. Conversely, if the answer is “yes”, they are

probably way out of your league in terms of their fees

6

How often do you make mistakes?

No-one is infallible. A little humility is a good sign, as well as being willing to admit and explain the reasons.

7

How familiar are they with the work of Luca Pacioli?

This should be Accounting 101.

If they do not know the answer, they have no curiosity or sense of history. On the other hand, if they expound at length, you should wonder whether they might be a little too academically- rather than practically-focused.

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Why are you even in Bermuda?

This should evoke a look of bewilderment, followed by the statement that they are surprised you would even ask such a question, as they think the Island is a wonderful place and they are committed to it.

9

Do they have a good relationship with the Office of the Tax Commissioner?

Another tricky one. You want

them to maintain an open and cordial relationship, but not one that is too close- all a question of degree.

10

What’s the difference between an accountant and an actuary? In other words, do they have a sense of humour?

In other words, do they have a sense of humour? One “correct” answer is…”The difference between actuaries and accountants is actuaries already know they are dull and boring”.

Bonus question for 10 points: Do they golf?

Why does this matter? The only difference between actuaries and accountants is that actuaries don’t have to know how to golf in order to get a job. Hard to know whether a non-golfing Bermudian accountant is a good or a bad sign!

Of course, the above list is somewhat tongue-in-cheek.

However, the underlying and serious point is that if whoever you are interviewing tries to patronize you, evades your questions or exhibits no sense of humour, leave very quickly.

DECEMBER 2018 RG BUSINESS

7

BANKING

Mortgage is a serious business Thoughts on The Throne Speech

BY JOHANNES EULEN Owning their home is still a goal for most Bermudians, but one that has almost certainly become harder in the wake of the Great Financial Crisis and continuing economic stagnation on the Island.

So, it is perhaps not surprising that, in the recent Speech from the Throne, the Government made it clear that it intends to take steps to remedy what implicitly it sees as long-term profiteering on the part of the local banking system in regards to residential mortgage lending.

It has been brought up as a concern, the banks’ “practice” of earning a return on their equity of up to 24 per cent, while the

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RG BUSINESS DECEMBER 2018

fact that they have begun to raise interest rates in the face of rising rates in the United States can be seen as unfair and an undue burden on the local population.

Of course, one can have a long debate about what is a “fair” or “appropriate” return for a bank on the Island given the characteristics of its business. However, the we don’t want the Government

to lose sight of the fact that a healthy and robust banking system is essential to the proper functioning of any developed economy; and that any bank in an economy whose currency is linked to the US Dollar, and the majority of whose balance sheet is denominated in US Dollars, cannot blithely ignore the actions of the US Federal Reserve.

Turning to what was stated in the Speech, the Government alluded (without any specifics) to the following: • “engaging alternative financing regimes” • “guarantees to reduce mortgage costs and repayments” • “where required, legislation” • Eliminating transactional stamp duty on mortgage re-financing related to amounts under $750,000.

Precisely what is meant by the first point is unclear. We know that the Government wishes to create an alternative banking system to further its goals of fostering a “crypto-economy” on the Island.

Does it envisage such institutions somehow becoming involved? Stablecoin mortgages for all, perhaps?

On the second point, the inference is that the Government will create a guarantee system that will cause the banks to regard the Government as standing behind a borrower’s mortgage, so that if he or she defaults it will make the bank whole. Perhaps the Bermudian equivalent of Fannie Mae and Freddie Mac in the US or CMHC in Canada?

In essence, the Government’s aim may be to “socialize” the risk of banks’ mortgage books in the hope of creating a more competitive and openly priced market. It would be churlish to dismiss the idea out

of hand, but great care will be needed in devising a structure that does not lead to further distortions and increased costs.

The third point is vague.

Point four is interesting, because it assumes that eliminating stamp duty on a portion of the ”domestic” (as opposed to “foreign”) housing market will increase competition and (ignoring the elimination of stamp duty) induce banks to lower their lending margins.

The proposal certainly removes one calculation from a borrower seeking to re-finance. However, ironically, it could also reduce Government revenues, and introduce distortions (and

“

great care will be needed in devising a structure that does not lead to further distortions and increased costs.

the potential for “under the counter” transactions) in local housing market pricing.

While we’re here to probe topics such as this, we do applaud the fact that the Government is at least re-examining the status quo and thinking about ways in which to reduce the burden on hard-working families of owning their own home. We shall watch how policy implementation unfolds with interest.

FINANCE

Ready, Set, Grow

To give or not to give

The question of the year-end bonus

BY DUNCAN HALL So, you’ve had a good year. Income is up, expenses are down – the company is thriving.

And now comes the question on the minds of everyone who works for you – is the company going to share its good fortune with the people who made it possible?

But how do you, as an employer, decide whether to award a year-end bonus?

Doug Soares, managing partner of management consulting and outsourcing company Expertise, said that “annual bonuses are quite common in Bermuda in non-unionised workplaces.

“These vary from relatively low value amounts given at Christmas time to very large amounts paid out after the organisation’s financial year-end,” he says. “Typically, when amounts are given at Christmas time, they are considered gifts, the inference being it is not guaranteed and is discretionary. However, when the amounts are large, meaning 10-50 per cent of annual salary, it is common for objective criteria to determine some, or all, of the amount paid. Management discretion sometimes plays a part in it, but the financial performance of the company or employee’s business unit tends to play a key role along with the employee’s personal contribution to achieving the results.”

A carefully-designed annual bonus scheme typically results in higher employee productivity, he says.

“When employees know their personal productivity directly results in greater rewards, they tend to produce more. Conversely, employers that simply pay for time actually motivate employees to produce less. Employers who recognise this dynamic realise that it is both fairer and more profitable if you pay for output and results rather than merely inputs such as time and effort.

“Most well-designed bonus schemes are self-funding. If productivity goes up, the employer pays more. If productivity stays the same or decreases, bonuses do not get paid.

“But not all employees conduct work that is easy to measure, and many employers do not have profit margins sufficient to pay cash bonuses which are significant.

“For such workplaces, it is not uncommon for employers to give non-cash awards with high perceived value.

In Bermuda, airline tickets are common. That’s because the perceived value of a pair of tickets to New York is far greater than the actual cost.

Similarly, if an employee enjoys fine wine, the value of receiving a bottle of fine Bordeaux is greater than its cost because of the thoughtfulness of the employer and the experience of drinking the wine. Employers that are thoughtful often get more bang for their buck because there is no love in receiving cash from your employer.

“A genuine thank you, meaning heartfelt appreciation felt by employees, will always do more to retain and motivate people than paying cash,” Soares says. “The best employers, of course, are those that have both intrinsic reward systems that demonstrate appreciation for a job well done as well as extrinsic rewards which link some of an employee’s compensation to their productivity. Most employees like the opportunity to earn more if they perform well and exceed expectations.”

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TRAVEL

Keep it personal

When is it appropriate to bring your family on a business trip?

BY ANNABEL COOPER Whether you work for a large multi-national corporation or a smaller business tailored to the Bermuda market, it seems that a certain amount of international travel has become the norm for most business people on the island. If you have a family, this can sometimes cause logistical or emotional difficulties, or even both. Do they always have to be left behind? Is it ever appropriate to take a partner or even your children with you?

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RG BUSINESS DECEMBER 2018

“It depends what type of business trip it is,” says Greg Wojciechowski, President and CEO of the Bermuda Stock Exchange (BSX). “It isn’t appropriate to bring a family member to a specific business meeting that’s discussing a transaction or corporate information as they are not bound by company responsibilities and confidentiality agreements, but where the event has been structured to anticipate family members, then it is entirely appropriate.”

Wojciechowski explained that the BSX is a member of the World Federation of Exchanges (WFE), which has a general meeting every year where they encourage people to bring their spouses or partners because they arrange a whole programme that sits alongside the event. One year, he even took his 21-year-old son to a meeting in Shanghai: “He didn’t attend any of the specific corporate meetings

as they related to the organisation but we had a couple of days of seminars that talked about developments in the capital markets and we did a couple of presentations to the Shanghai business community.

He was made very welcome and was able to join us at some of the business dinners in the evening.”

Those who work in the insurance industry also point out that bringing a husband, wife or partner with you to certain events, especially more social occasions, is nothing new, however if you want or need to bring your children along, especially younger ones, that can be more difficult.

Peta White, who is Head of North American Property Reinsurance at Markel, is pro families travelling on work trips especially if a company is asking their employees to work during family times but she says it mustn’t interfere

“

A certain amount of international travel has become the norm for most business people on the island.

with your productivity. She also explains that she has the bonus of having a husband who can come with her to take care of the children during business meetings and dinners, so her family is kept separate from the business side of the trip: “I have had the luxury of being in an industry and working

for a company that supports family travelling with me,” she says. “After I had children, I wanted to continue breastfeeding, but also wanted to return to work. It shouldn’t be an additional cost to the company and it shouldn’t hinder your productivity, but I found that when I had moments in be-

tween meetings and dinners to be with my children, I was much happier and more productive because of it.”

White emphasizes though the importance of having a support network that can travel with you to help look after the children. “If families have a spouse or parent, it makes it easier, without a doubt. I would have been challenged otherwise.”

Laura Farge-Lowe, Managing Director of Island Trading Ltd, agrees with White about travelling with babies: “If you are committed to nursing a child, you often don’t have a choice,” she says. “The easier option is to take them with you.” While Laura is in a different situation to those who work for large financial institutions, she says that representing a small retail business has additional challenges: “You have more flexibility, but if you’re a small business no one else can necessarily do your job, so you have to do business trips sooner than if you could take longer maternity leave.

You have to have a really good

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structure in place where you can rely on someone else like a spouse or nanny.”

Laura’s daughter, Freya, went to her first trade show at nine weeks old. “I was fortunate enough to be able to bring along my mother and my nanny so that I could focus on work when I needed to.”

In instances where your family has not been invited on a business trip, but you need to be with them, whatever the reason, it seems you can bring them as long as you are able to pay for them yourself and have reliable help, so it doesn’t impact on your work. Might this situation ever change? Are companies ever likely to make it easier to bring your family with you on a business trip?

“I think they should,” says White. “With the advancement of technology, it is so much easier to bring work into the home than vice versa. Finding quality family time is harder and harder and as such, companies need to make a conscious effort to be more supportive of a family inclusive lifestyle.”

REAL ESTATE

The Villas at The Loren

Hotel living Bermuda’s newest real estate trend

BY BUDDY REGO

Bermuda has ushered in a wave of luxury hotels after a lull in new developments of nearly half a century.

The Loren at Pink Beach, which opened in Spring of 2017, won the title of the first new luxury boutique hotel in Bermuda. Around this time Bermuda saw some exciting changes, including the multi-million-dollar renovation of The Hamilton Princess by the Green family and the acquisition of Tucker’s Point by Gencom. Similarly, 2018 saw the launch of Azura Boutique Hotel, as well as the groundbreaking of the Ritz-Carlton Reserve’s Caroline Bay and the St. Regis Bermuda.

Buddy Rego explains how Bermuda has been on-trend with the global real estate market.

There has already been strong interest from local and international buyers for residential condominiums that are part of larger hotels and provide hotel-like amenities. This interest will only continue to grow as

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construction progresses.

Why? We all love the feeling of checking into a five-star hotel and knowing that our every need will be looked after.

This white-glove service is the foundation for the success of hotel living.

Similarly, technology is at the forefront of this trend as

more prospective buyers are seeking out smart homes which feature integrated systems that synchronize entertainment, climate, security controls, etc. often to one main device.

Buyers don’t just want a house with fancy gadgets though, they want to be inspired by their surroundings.

Experts say clean lines, floor to ceiling windows and open plan living are some of the top design elements that clients are looking for across the map. Hotel resident owners can expect a standard and convenience of living unseen in more traditional residential communities.

Take the Villas at The Loren at Pink Beach for example.

These two-story fully furnished condos showcasing contemporary designs, each with their own private pools are remarkable. Pair them with access to two top restaurants, a beach club, gym, spa, concierge services, curated events from world-class wine tastings to entertainment and the appeal is unquestionable.

Arguably the most frequent buyers entering the luxury hotel-condominium market are downsizers, young professionals and new affluent millennials.

However, the doors of opportunity for hotel-living have been opened making ownership far more flexible.

Bermuda’s latest hotel community, Azura Boutique Hotel and Residences, offers several unique use options – including a full residence or additional bedrooms available for rental opportunities through their hotel management company.

Similar investment opportunities are available with the Villas at The Loren at Pink Beach.

The next hotel living opportunity garnering attention is the Residences at the St. Regis Bermuda. These two- and three-bedroom condominiums priced from $1,775,000 will be available in 2021 and have already begun attracting interest from international buyers.

“This is an exciting time for Bermuda real estate as developers are now satisfying the increasing demands of discerning buyers,” commented Mr. Rego, “In a span of only a few years Bermuda has truly stepped up its game concerning new developments and now boasts the gold standard of luxury hotel condominium living.”

TECH Apple Watch Series 4

Plug & Play

The top rated smart watch on the market has been redesigned and re-engineered, keeping you “active, healthy and connected”. Equipped with a new electrical heart sensor, and automatic workout detection, receive low and high heart rate notifications and compete head-to-head with friends for motivation.

7 Gadgets to help you take on the new year

GoPro HERO7 Black

BY RAJAN SIMONS

Anker PowerCore Lite Battery Pack Fully charge your smartphones twice and have power to spare with this 10,000 mAh capacity battery pack. Includes a USB port, a USB-C port and a microUSB connector.

Lexicon Hardside Frequent Flyer Smart Suitcase

Ultimate Ears BOOM 3 Waterproof Wireless Speaker

This carry-on by Victorinox is ideal for the frequent business traveler. It has a single USB port with a pre-installed cable and a dedicated zipped pocket for your favourite battery pack (not included). It comes in two stylish colours, titanium and black and also has a SIM card pin, which allows international flyers to easily change their phone carrier while abroad.

The best waterproof speaker on the island, the new BOOM 3 has amazing 360-degree sound, battery life up to 15 hours and other features accessed via smartphone app. It can be fully submerged into water and is designed to float making it perfect for life here in Bermuda. stylus are sold separately.

The seventh generation of the popular action camera continues with the same design as the previous models but has a black chassis – hence the name “Black”. The waterproof camera weighs about 116g, shoots 4K video at 60fps, has three red LEDs to easily detect recording, three microphones for stereo audio and noise cancellation and is compatible with existing GoPro accessories.

Tile Pro Tracker Microsoft Surface Go Windows 10 tablet Great for creatives on the go, the Microsoft Surface is ultra-compact but also able to be used as a laptop, with topnotch battery life. Its detachable keyboard and Surface Pen stylus are sold separately.

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RG BUSINESS DECEMBER 2018

Misplacing commonly used items is now a thing of the past. With Tile, you can track anything you attach them to, as long as your phone (with the mobile app) is within their Bluetooth range. When you lose an item, you’ll receive notifications when the gadgets come within the range of another Tile user. Available in black and white.

TOP TREADS

Renault Clio IV

The most powerful comes to us Renault Clio IV

BY IAN HIND The Renault Clio is now in its 19th year of production, and for those of you old enough to remember these things, its predecessor was the Renault 5. The current version, the Clio IV, has been in production since 2012.

It is one of the most successful models ever produced by Renault and ranks with the Volkswagen Golf and the Opel Astra as having been voted twice as European Car of the Year.

Facelift changes and marketing priorities meant that the Clio was not available in

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Bermuda for the last two years, until the present models began arriving a few months ago.

It is now for sale at Eurocar, Woodlands Rd at $31,500 as an E Class car.

Of the three engine sizes made, Bermuda gets the most powerful 1.2 litre turbocharged

version. Producing 120hp (89KW), it is connected to a 6-speed automatic transmission, with optional manual gear selection (M mode). The 5-speed manual box is not available here.

Size wise, the Clio is classed as a ‘Supermini’, one class below ‘Compact’ and its light weight, at around 1000kg, means that the 120hp engine gives it plenty of zip. In fact, if you were allowed to, it can reach 124mph. The ABS brakes help you to stop without any drama. The throttle response is excellent, particularly when you press the pedal to the metal ascending a hill. I choose to keep the transmission in the full auto mode and not bother with manual selection. I find that, although most cars now have the choice, on our roads with relative low speeds and short commute distances, its not worth the effort playing with the box. If you want the lowest fuel consumption, leave it in the auto mode.

The steering wheel is quite

small, but feedback from the 17 inches black alloy wheels is precise and positive. There is both up/down and in/out adjustment, so I was able to find a very comfortable driving position.

The combined cloth and leather seating give plenty of support with adjustable leather sides that hold you nice and firmly in place. The dashboard layout is clean and neat with all instruments easy to see and read and switches well within reach. A back-up radar display on the centre console touch screen helps while reversing.

The rear seats are comfortable and roomy enough, with sufficient headroom and leg space, even for a 6-footer like me. The 60:40 rear seat split gives access to a good-sized boot (trunk) which has a fullsized spare wheel mounted underneath. It is released by a mechanism on the inside floor of the boot.

Exterior style wise, it is not that much different from the many other cars in its class, but it is distinguishable by the un-

usual chevron shaped Renault badge, mounted on the front and rear, and the body coloured lower door protector and side skirts. Halogen headlamps, LED daytime running lights, chrome accents, and rear door handles imbedded in the rear door frame add to the look.

The standard accessories fitted to the Bermuda model include an FM/AM/DAB tuner, a Bose Premium sound system with 2x20W speakers, Bluetooth, USB and AUX sockets, cruise control, Hill Start Assist, tyre pressure warning light, a tyre inflation kit, a hands-free key card with push button Stop/ Start function, pollen filters and so on.

Of course, the proof of the pudding is in the driving.

Everyone has different tastes, preferences, budgets and needs, so I strongly recommend calling and booking a test drive.

INSURANCE

An internet minute

Bermuda’s own personal information protection act

BY GEORGE THOMAS Operating in Bermuda, an international financial centre, forces business people to remain abreast of the constantly changing landscape of global regulations. These regulations, almost invariably, are condensed into acronyms, drowning us in a sea of alphabet soup: AML...KYC...ATF...FATCA....BEPS...

CFATF...CRS...and the list goes on. Of course, who could ever forget the most dreaded acronym in recent memory that consumed extensive resources and time: Y2K? Two new acronyms entered our regulatory lexicon in the past two years: GPDR & PIPA. These regulations both address the need to protect the privacy of individuals in the age of the internet and the constant flow of digital information.

GDPR (General Data Protection Regulation) was adopted by the European Union (EU) and came into force on 25th May 2018. GDPR protects EU citizens by giving individuals more control over how companies use their personal data, usually referred to as “PII” or Personally Identifiable Information.

How many readers started receiving interesting emails from companies disclosing their privacy policies in April and May 2018, or were suddenly forced to review and acknowledge privacy policies in pop-up windows? These corporate actions were directly related to GDPR and the potential risk of significant fines for noncompli-

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ance: the greater of €20,000,000 or 4% of worldwide revenue.

A LOOK AT BERMUDA’S PIPA Bermuda created our own Personal Information Protection Act of 2016 (PIPA) to establish local legislation and regulations, essentially to meet EU data privacy standards. PIPA received Royal Assent on 27 July 2016 and is expected to go into force once an independent Privacy Commissioner is appointed to ensure the aims of PIPA are being met and oversee

compliance.

Why are these regulations important? Globally recognized companies have been hacked leaving millions of records compromised including: Equifax-146 million records, Under Armour-150 million and Yahoo!

- three billion records. While these numbers may seem high on initial glance, we need only reflect on our daily activity.

We are constantly on devices connected to the internet, generating and sharing information, leaving a wake of digital information; a digital footprint.

In this day and age, every organization needs to understand the information that drives the components of its business model; the organization’s information lifecycle.

This lifecycle starts with the creation and/or acquisition of information. Organisations must understand what data is being collected and created, who it is from, how it is obtained, and through what channels? Next the organization needs to understand where is data stored – both inside and outside the company?

The organization then needs to develop a complete picture of how the data is being used, what it is being used for, and who is using it? Data is frequently in motion or transmission, being shared – inside and outside the company, sometime across multiple jurisdictions.

Last, but certainly not least, the organization needs to decide on options for archiving and ultimately disposing of data.

How is data retained – both by the company and by third parties, for how long, and how is it destroyed?

Policies, procedures and controls provide the framework for effectively implementing the elements of an organization’s information lifecycle.

Policies are created to meet the organization’s legal and regulatory obligations. Procedures describe step by step processes that enable the firm to carry out workflows in a manner that is consistent with the policies.

Controls are designed and tested to provide evidence the policies are followed consistently.

LIMIT, PROTECT AND RESPECT! There are three principles to apply when dealing with personal data: limit, protect and respect.

Limit the personal data you collect to include only what you need to perform services for customers/individuals. Be diligent and judicious about what you collect and make sure you only use that information for the designated business purpose.

Protect the data that you collect through effective procedures and controls. Access should be restricted to only

Source: Lori Lewis, Vice President, Social Media for Modern Luxury. @LoriLewis @OfficiallyChadd

those who need the information. Flexible and remote working on laptops, tablets, phones, and reading printed materials on airplanes or in transit create potential exposure of sensitive information.

Respect the rights of the individuals whose personal data you collect, store and share.

GDPR requires transparency, the ability for individuals to opt in or not, and providing individuals the right to be forgotten.

BOARD GOVERNANCE Ultimately, the board of directors must understand the dynamics of privacy in the age of GDPR and PIPA and embed data privacy risks in the organization’s Enterprise Risk Management framework. The pressures of GDPR has increased the expectations for oversight of information technology and digital assets by directors. According to PwC’s 2018 Annual Corporate Directors Survey, more than four out of five directors (83%) say their board is very or moderately involved in monitoring the status of major IT projects. Close to 75% say the same about the company’s digital strategy.

Read more: www.pwc.com

With the major security breaches involving data privacy, and evolving regulations — more directors also say they are engaged with overseeing or understanding big data. The percentage of directors saying their boards are at least moderately involved jumped to 65% from 51% in 2016. Directors also report being much more involved in overseeing how their company leverages and monitors social media. Both of these areas have shown substantial increases since 2016.

The principles for handling personal data in a prudent manner provide guidance to organizations. The board and executive team must give clear direction and set the tone regarding the importance of data privacy and establish an appropriate operational framework, including appointing a data privacy officer (DPO). Effective policies and procedures, tested on a consistent basis through well designed controls, can ensure that the organization is meeting global standards.

George Thomas is Senior Advisor of Consulting at PwC Bermuda.

RECRUITMENT

It’s not what you know, it’s who you know How to network in Bermuda

BY KEITH SZMIEREK With Bermuda being such a small physical space and population, there is even more opportunity to create lasting relationships with people that matter. While the resume is always going to be an incredibly important piece of the recruitment puzzle in finding a role, how you develop your network and maintain it is equally as important, as strong connections within your field open up otherwise missed opportunities.

While the ability to network effectively doesn’t come naturally to everyone, the process of developing relationships

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with like-minded people can be developed. Whether you’re at the start of your career or have decades of experience, there are

a few do’s and don’ts that apply to everyone:

Involvement Volunteering, playing sports or coaching kids, getting involved in the church or being active in your community are all great ways to meet people on a level footing and build your network.

Social media Having an informative LinkedIn profile is a great way to show off your skills and make you more marketable. Keeping your profile fresh by updating it or regularly posting relevant articles are important ways to market yourself in the information age.

excellent opportunities to rub shoulders with decision makers.

There will be plenty of times when you don’t realise you’re having dinner or a drink at a table next to someone who is influential. That said, for the same reasons, be wary of your surroundings before you overindulge!

Simply sending in job applications might not be enough – spend some time on building your network. Done right, it can provide a range of benefits, including the exchange of ideas, knowledge and information that can take your career to the next level and develop longstanding friendships along the way.

Events Attending events is great, but take your networking up a notch and really showcase your expertise by being a speaker/ panelist instead of just an attendee. Presenting at an event will boost your credibility as a leader in your profession and will give you a platform to offer insight to others.

Get in there Bermuda’s size provides

Keith Szmierek is the Recruitment Manager for Bermuda-based recruitment agency Frontier Financial Services Ltd. Established in 2000, Frontier provides both permanent and consulting recruitment for international and local business, as well as immigration and new business set-up, compliance and related professional services.

TIPS

for networking

BY KEITH SZMIEREK

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5

results. Good connections and relationships are developed and payoff over time.

A concise personal and professional profile of who you are.

Thank people for their time, connect with them on social media and do whatever it is you said you would do.

8

Create your elevator pitch

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Get out of your comfort zone Make every effort to engage with people you don’t know.

Take the initiative.

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Ask questions, listen and learn Anticipate the kind of people you’re likely to meet and what you would like to ask them.

Then listen and learn from the response.

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Follow up and follow through

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Be careful about what you post online You wouldn’t think to post your resume on Facebook or Instagram, but make no mistake, more employers research all social media when deciding who gets the job offer. Creating a professional image on LinkedIn is a great tool but don’t undermine it with what can be found on other social media.

Bring plenty of business cards

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Exchange them with people you speak with.

Developing contacts isn’t always about immediate

Be patient

Be prepared

Before heading to networking events, make sure you find out who is going and think about what you might ask them or want to learn from them.

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Don’t be “too social” Remember that first impressions last, as do old impressions that might still be on your social media. Be careful not to overindulge in the wrong circumstances.

SMALL BUSINESS

Operational brilliance Marrying passion and know-how

BY JONATHAN KENT It is often said that Bermuda is a country where the entrepreneurial spirit abounds. Perhaps some of this is due to our history and our geographical location.

Living on a remote island in the middle of an ocean has forced Bermudians to develop an “innovate to survive” mentality over the years. From privateering and onion production all the way to tourism, reinsurance and fintech, islanders have always been willing to try something different and take a risk.

A staggering statistic that backs up the idea of Bermudians as natural, born entrepreneurs came out of a survey conducted by the Bermuda Economic Development Corporation in June this year. It found that 84 per cent of people were interested in starting a business within the next two years.

Having a great idea is one thing, but building an enter-

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prise to last is on an altogether higher level of difficulty.

According to the US Small Business Association, 30 per cent of new businesses fail within their first year and 50 per cent during the first five years.

So what are the magic ingredients that entrepreneurs need to succeed? Passion is widely touted as a critical element. Anyone starting new

business will face a succession of challenges and hurdles.

Overcoming them will require stamina, determination, an unerring belief that the idea can succeed against the odds, a willingness to work around the clock to make it happen, all of those things driven by a passion to do something you really want to do.

Without it, perhaps one would be better sticking to the relative certainty and stability of the world of employment.

As Denis Waitley, the motivational speaker and author of The Winner’s Edge, succinctly put it: “Chase your passion, not your pension.”

Passion is a powerful and arguably necessary force for any entrepreneur to possess in order to make an idea reality. On its own, however, it’s not enough.

Indeed unbridled passion can lead to trouble, in business and in other walks of life. Marico Thomas, founder of Glaze, Four Star Pizza and Bermuda Medical Specialties Group, said during a panel discussion at a recent BEDC event: “Passion is nothing without purpose.”

Purpose is the product of marrying that passion with some hard-headed planning, enhanced by realistic and hon-

“

Having a great idea is one thing, but building an enterprise to last is on an altogether higher level of difficulty.

est analysis, the heart joining forces with the head. The conflicting characteristics are not easy to harness together, but the most successful entrepreneurs are those who manage to do it.

Daniel Isenberg, a professor of entrepreneurship practice at Babson College, argues that passion is dangerous to businesspeople as an emotion that can blind them. A much scarcer and more valuable quality, he believes is “cold-shower

self-honesty”.

“Mixing the oil of self-belief with the water of dispassionate assessment is probably the entrepreneur’s toughest task,” Professor Isenberg wrote in the Harvard Business Review.

Indeed, when one looks at the most common reasons for business failures, they would seem to be linked to poor planning and weak data or analysis, rather than any lack of desire or determination.

Diving headlong into business without doing proper market research is a common mistake. A thorough business plan, built on solid research, and including the cost of various inputs, a strategy for the business and a timeline can allow an entrepreneur to identify and think through solutions for challenges that lie ahead, even before the business is up and running. A weak business plan will be a

roadmap to strife.

Having sufficient capital to last the new business to the point where it is generating positive cash flow is another necessity. A bad location, lack of a web presence and poor branding are other weaknesses that can arise from poor planning.

The assessment abilities are also important in keeping the passion side in check.

Professor Isenberg identifies four such areas - distinguishing between real success and praise or awards; telling yourself truth even when it’s uncomfortable; surrounding yourself with people who will do what’s right for the business, even if your feelings would dictate differently; and knowing when to call it a day. This last point speaks to the “fail early and fail often” adage that successful entrepreneurs sometimes cite. Knowing when to

press the restart button and coming back in a smarter and stronger form on the back of the failure experience are the qualities that turn failures into success.

The reality is that no amount of entrepreneurial passion can make up for a lack of serious, cold-headed assessment abilities. It’s equally clear that a brilliant business plan, backed by excellent research and identification of the perfect location cannot in itself launch a business. A determined and courageous owner still has to “take the plunge” to make that happen.

Both sides are necessary and, furthermore, they need to be in balance. Maybe that’s why truly successful entrepreneurs are so rare.

INDUSTRY

Bermuda’s games industry

A business opportunity?

BY KRISTEN SCOTT NDIAYE Nike just signed their first eSports star, Chinese League of Legends player Jian Zihao. In September, ESPN featured the first professional gamer to appear on any magazine cover – anywhere.

If you Google UKIE1 , you’ll find that it’s a trade body that represents the interactive entertainment industry within the UK, and its sole purpose is to work at making a positive image for video games and other

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forms of entertainment within the media industry.

Try IGDA2 . You’ll discover a society of over 10,000 video game developers worldwide.

They describe themselves as being “dedicated to the promotion

of innovative ideas and latest developments.”

Women in Games is another example of a professional body that shows an opportunity for a growing industry, and the buck doesn’t stop there: Jian Zihao’s new t-shirt partnership with Lebron James makes one wonder about the possibilities beyond the creation, to selling, franchising, merchandising, and building national players to play on an international level.

Every year, the Department of Education’s Gifted and Talented Education Programme holds a science, technology, arts, engineering and maths (STEAM) academy – which included a Gaming Academy 2018 for children who are interested in learning video game and technical theatre production.

Recently, Trojan Horse Gaming put on a successful full-day Fortnite (Epic Games) Tournament. Over 100 children

participated. “Bermuda has many talented players,” says Dion Correia, CEO of Mindshift Entertainment Group Limited and founder of BermyCon, “We have started the process with reaching out to various gaming companies overseas to build a number of international eSports tournaments that can possibly be played here in Bermuda.”

While Trojan Horse wants to play games, Adrian Lodge, founder of Bermuda Island Games (BIG), wants to build them, and both are working with the Bermuda College to explore interest in the subject.

There may be room to sit beside their Robotics and Electronics courses. “I want to do with games, what we are doing with fintech.”

BIG is an independent game development company that aims to promote the island through games in the most entertaining and educational

The Association for UK Interactive Entertainment International Game Developers Association.

Developed by California-based studio Epic Games, Fortnight is what’s known as an open-world survival game, in which players collect resources, make tools and weapons, and try to stay alive as long as possible.

RG BUSINESS DECEMBER 2018

way possible. Winner of the Rocket Pitch 2018 for a series of educational games, his most recent project involves an adventure with Sir George Somers. He also plans to put on a small competition to see who can come up with the best idea to start building games locally.

When he thinks about a games industry on the island, he refers to what we already know, “The reinsurance industry is doing well here because we have the right infrastructure and regulations.”

He feels that we can build what is needed to really fill in a gap in the market.

Despite having the most expensive internet and a limited population compared to other places with thriving industries, Lodge believes that it is very possible to create games in Bermuda that are profitable worldwide. He would even go so far as to say that “this is the third leg.”

After international business and tourism, could we have games?

To give an idea of how these types of things are doing elsewhere, Red Dead Redemption 2, an action adventure game developed

by Rockstar Games in San Diego, released end of October and made $725 million

worldwide in its opening weekend. If we compare that to the film industry, Disney’s Avengers made only $640 million upon its debut last April.

Aside from the potential income for the island, developing games brings skills that are easily transferrable and even sought after, i.e.: • graphic design (building background and character); • programming (the same skills are used for website and application development); • product development; • storytelling (the creator has to ensure that the character connects with the player and pays attention to details such as historical accuracy); • creativity; • project management (deadlines, understanding, concepts); • audio engineering (sounds effects and voice acting); • camera work; and • choreography For those that are interested in games beyond the playing aspect, there is opportunity to build careers in marketing, advertising and more. “With this in mind,”

Correia says, “we have structured a plan that will include us working further with the government in making sure that we are able to build a foundation and direction in helping to build interest in all areas of gaming.”

How can business get behind this? Help to create the space for innovation and learning to take place, or look to ESPN and get behind a gamer. One Communications has already committed, along with BermyCon, Gamers BDA, DNA Creative Shoppe and Bermuda Tabletop Wargaming, to bringing international gaming to Bermuda.

Venues can sponsor their space for tournaments, parents can volunteer, and of course, financial donations go a long way. Companies can, of course, benefit from the normal advertising spiel, but moreso by taking on the corporate social responsibility to contribute to an industry, create opportunities for different learners, innovate the island and educate the world. A stretch?

“That’s the thing about games,” says Lodge, “the limit is your imagination. You can build anything. That’s why kids are drawn to it.”

PHOTOGRAPHY: BLAIRE SIMMONS

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INDUSTRY

Sir John Swan on leadership Sir John Swan is a former premier of Bermuda, a real estate mogul, has sat on many boards and guided many organisations and individuals to success. He sat down with RG Business to share his thoughts on Bermuda’s future in leadership.

Kristen Scott Ndiaye: We wanted to talk to you about this because even though you’re not in politics, necessarily, I would imagine that you – your brand, and your actions – still have a responsibility of a leader in Bermuda. What do you think?

Sir John Swan: Anyone who’s been given the privilege that I’ve been given – I had parents who had confidence in me as a young person, forced me to go abroad to get an education and, though I had dyslexia, had the word “failure” taken completely out of my lexicon. I should feel responsible for helping Bermuda to achieve its goals. Though not political, I feel intellectually responsible for making sure that Bermuda is headed in the right direction.

KSN: Right. Now, you didn’t start out as a leader. You’ve described your playground as Pembroke Marsh and just shared that you had your share of hardships – dyslexia, visual impairments. From there, what has been your journey to leadership?

JS: After school, I came back to start a business that, for 10 years, built 40 percent of the homes on this island. I belonged to organizations and served on many boards, both locally and internationally, which gave me a broad view of Bermuda and the rest of the world. This led me to become premier, where my job was to make Bermuda as viable and as functional as possible through policies and programmes. I was physically responsible for the country, but at the same time expected to

act with a social conscience.

KSN: I find it interesting that that social conscience has stuck with you after so many years; and after so many years, you seem to have stayed relevant in business.

What’s your secret?

JS: Well I try to remain relevant, not only in business, but in all sorts of other activities that affect Bermuda. It requires a lot of reading, a lot of studying and staying on top of what’s happening locally and internationally, and learning to change with the times.

KSN: Of course, and we know that it’s important in business, and in life, to be able to pivot. How do you do this?

JS: Every ten years I would reassess my business and decide whether it needed to be changed. It was very fortunate

that I made those changes and it seemed to always be ahead of the curve for things that have impacted the Bermuda market.

KSN: How can other leaders do that?

JS: I’d say pay attention to your instincts, pay attention to what other people are saying to you, and learn to listen. Most people fail because they fail to listen.

I’ve tried to be very sensitive about other people’s feelings and views, and they’ve helped me with the things that I’ve been able to achieve.

KSN: So, you would say that success is not gained alone.

Would you say that seclusion is the enemy of creativity?

JS: It’s a tough question, because there are a lot of people that do a lot of productive thinking in seclusion. You have to find a balance. I call it

DECEMBER 2018 RG BUSINESS

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“

There is nothing more damaging then fear

Sir John Swan

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the “Iceberg Effect”: 9/10 preparation and 1/10 effect.

Anytime I give in my career, I make sure it’s something worthy. There’s a lot of research that goes into my speeches and my articles. If I don’t plan in seclusion, it makes for an uncomfortable outcome.

KSN: More on those uncomfortable places in leadership: what advice do you have for those moments?

JS: To that I say do unto others, as you would have others do unto you. Everybody knows that I’ve been in some uncomfortable situations.

Leadership is about raising people up. Sincerity, integrity, forthrightness are all very important qualities in a leadership role. Be prepared to stand behind anything that you say and take the consequences for it.

KSN: When you say things like that, I have to say that you’re an inspiration to many young people on the island. Are you aware of how your image drives young men, especially, to get into business?

JS: I’ve always had a good relationship with young males in Bermuda. I think that comes from trying to fulfill the image that I give off, and leading not from policies, but from setting a standard – a standard in what you say, in how you look, how you conduct yourself in a particular set of circumstances. When people see me, there’s a consistency. They know who I am. They know that we can have a two-way conversation about whatever they need to be a leader in the community – that doesn’t necessarily mean government, it could mean at a school or on a

football field.

KSN: What advice do you give them?

JS: Many people want to receive and don’t understand that it’s when you give, that you get back the encouragement to succeed. I say, give your honest opinion, and not the one that you think you’re supposed to give.

From a young man in board rooms, I was invited to be a part of the Young Presidents’ Organization; because I said what I thought. You want to make people re-evaluate their thoughts. But don’t be forceful, that’s how people shut down.

KSN: That’s true because some people who experience the great success in leadership, find that it brings out the worst part of their personalities.

What do think about that?

JS: Sometimes people get caught up in their egos and they believe that they know everything. I think it’s the biggest mistake that people make. It’s important to be humble; and to work together with others to find your potential and vice versa. If you think that your leadership or your success is based solely on you, then you are doomed to fail.

KSN: What does Innovation in leadership look like?

JS: The world is going through a very uncertain period as a result of the technological revolution in the past 25 years, forcing us to redefine the norms. We went from the whole world sending messages at 780 miles an hour – the speed of sound – to sending messages at 196,000 miles per second – the speed of light. That’s

how information is flowing.

Everyone has access to information; but some are trying to hold on to the old world.

Innovation in leadership looks like bringing energy back to Bermuda. Right now, Bermudians are going away to school – London, Toronto, New York – and coming back saying, “What am I doing here?” They have to feel like they can continue their education, and contribute. Some young Bermudians are just staying away because there’s nothing here for them.

Leadership looks like asking Bermudians about what they want, and facilitating it, not dictating it. It’s a commitment to making Bermuda a viable place for everyone – even if it means bringing people in to get the job done.

We have to step on new ground. I think blockchain is very important, but it can’t be just about that. When you sit down to a meal, you want to have potatoes on the plate and vegetables on the plate, but you want to have meat on the plate, too (smile).

KSN: What is your vision for our island in the future?

JS: Whether you are a corporation or an individual in the leadership role, make Bermuda a place that everyone feels proud to participate in.

There’s been a withdrawal, and a fear in people that if they say something there will be grave consequences.

There is nothing more damaging then fear. I hold the leaders responsible not to inject the fear in others. Let’s reconstruct Bermuda.

KSN: Thank you so much for sitting with me.

INDUSTRY

Barcardi Building Bermuda

Hemingway’s Cuba, in Bermuda A story of how Bacardi came to the island

BY RAYMOND HAINEY Global drinks giant Bacardi was born in Cuba 156 years ago – but it was from its adopted home in Bermuda that the company grew up into the major player in the industry it is today.

Bacardi, still family owned and the largest spirits company in private hands, was founded in Santiago de Cuba in 1862 by Don Facundo Bacardi.

The firm’s more refined rum gained rapid popularity and was the tipple of choice for

hard-drinking Nobel Prize winning writer Ernest Hemingway, who drank Bacardi cocktails in Havana’s legendary El Floridita bar when he lived on the island for extended periods in the 1940s to the early 1960s.

The company would still be

there, but for the 1959 revolution that propelled Fidel Castro and a hardline Communist regime to power.

Bacardi assets in their homeland were confiscated, despite the influential family’s initial support for Castro’s effort to oust corrupt military dictator Fulgencio Batista.

The family was forced to flee to America, briefly setting up in the Bahamas before they settled on Bermuda as their new home in 1965.

Cuba’s loss was Bermuda’s gain and the unquenchable Bacardi spirit, which had survived, and even been involved in, previous revolutions against Spanish rule, flourished.

Some inside the company believed Castro did the firm a favour – because Bacardi grew from relative small fry focused on the rum business to a worldwide brand with a portfolio of drinks including Italian vermouth, French vodka, Scotch whisky, English gin and – most recently – the $5 billion plus acquisition of Patron, Mexico’s top-selling upmarket tequila.

And the expansion came on the back of a rock-solid home base in Pitts Bay Road in Pembroke, in a custom-built building inspired by a design by modernist superstar architect Ludwig Mies van der Rohe – a design at first intended to be built in Santiago.

The company went from selling 1.7 million cases of rum in 1960 – the year its Santiago distillery was stolen in a state nationalisation programme – to more than 10 million cases a year in 1976.

Juan Prado, a top Bacardi salesman who fled Cuba with his wife and young children after Castro took power and who helped set up the company on the island, told Tom Gjelten, author of Bacardi and the Long Fight for Cuba: “A lot of people think Bacardi should thank Castro for what he did because we would never have achieved what we did if we had stayed in Cuba.”

Prado argued that the loss of Bacardi’s Hatuey brewery in Cuba, a source of ready cash because beer was a lot easier to DECEMBER 2018 RG BUSINESS

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View from La Terraza 2014 by James Richards Fortworth make than rum and needed no expensive ageing, had forced the firm to concentrate on its spirits production, which propelled it to new heights.

But the company might not have come to Bermuda at all.

Carlos Bosch, who died in Bermuda earlier this year aged 91, recalled his struggle with his father, the formidable Jose´ “Pepin” Bosch, who headed the company in Cuba and in exile for many years, to move the firm to Bermuda at a party to mark its 50 years on the island in 2015.

Mr Bosch, who retired from the company in 1975, said: “We got the authorisation – but I had to convince my father.

It took two years to convince him.”

A handful of staff arrived on the island and started to rebuild the company, which had already expanded its operations outside Cuba to Puerto Rico and Brazil

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while corrupt Cuban military dictator Fulgencio Batista, toppled by Castro, was still in power.

Mr Bosch said: “Somehow, the small team we had gelled and it just worked.”

Eduardo Cutillas, who retired in 1998 and died last year aged 81, was also among the team that rebuilt the brand from Bermuda.

Mr Cutillas said at the 50th anniversary celebration that “closest to our hearts are the people of Bermuda who welcomed us with such warmth”.

He added: “I’m very happy we’re here and we are staying here. We’re not going back to Cuba. Bermuda is our home now.”

But the firm is not just known for its success in the spirits business – it has built a global empire with a social conscience carried on from its early days in Cuba, where its workers

were well-treated and well-paid in comparison to most.

Bacardi was named as one of the most reputable brands earlier this year for the sixth year in a row.

It ranked 89th in the the annual Global RepTrak list 100 list compled by the Reputation Institute and published in Forbes magazine.

Companies were assessed on ethical behaviour, fairness, product value and transparency, as well as their reputation as an employer, based on more than 230,000 individual ratings.

Mahesh Madhavan, chief executive of Bacardi, said at the time: “To be ranked six years in a row is an honour and a reflection of not only our portfolio of premium spirits but especially our thousands of dedicated employees around the world who embody the entrepreneurial spirit and values of family-owned Bacardi.”

“

The family was forced to flee to America, briefly setting up in the Bahamas before they settled on Bermuda as their new home in 1965.

The firm has also pioneered green technology to cut down on pollution in its operations around the world and is a major contributor to charity and the community in Bermuda.

When Hurricane Maria devastated Puerto Rico, where most of the firm’s rum is now made, last year, Bacardi mobilised its staff to set up “stop and go” aid centres and donated millions of dollars towards rebuilding the shattered island.

In Bermuda, the company earlier this year won the annual corporate blood donor campaign for the second year in a row.

The company is also the long-time main sponsor of the “Let us Drive” service run by anti-substance abuse charity CADA in Bermuda, designed to get people home safe after a night out in Hamilton.

Bacardi pledged half a million dollars over five years to the Bermuda Hospital Charitable Trust in 2014, to be used to help redevelop the King Edward VII Memorial Hospital.

And Bacardi donated $600,000 to the hospital in 2005 to buy a new state-of-the-art X-ray machine.

The company also used a tanker – normally used to transport rum – during a serious

drought in the early 1980s, loading it with water in Canada and transporting it to Dockyard.

Bacardi is also a major sponsor of the arts, including the Bermuda Festival, as well as a backer of sailing and fishing events.

Douglas Mello, the Bermudian global vice-president of corporate strategy at Bacardi, who is responsible for the operation of the headquarters, said both Bermuda and Bacardi had both benefited from their half-century plus relationship.

He explained: “Bacardi found a welcoming new home with a stable political and economic environment and a world class infrastructure that was crucial for its global expansion.

“Bermuda found a solid family-owned company that not only put the island on the international business map but also has helped to enhance the community for more than 50 years.”

Mr Mello said: “We are forging the future through a world-class finance function which is based in Bermuda.

“Many of our senior leaders have moved to the island with their families, much like the early leaders of the company did in the 1960s.”

He added: “We believe that

Bacardi and its employees benefit through a greater connection with Bermuda’s worthy charities and a sense of fulfillment in the community where we live and work.”

Mr Mello said: “Today, staying in Bermuda makes perfect sense. As one of the highest profile companies on the island, we appreciate the Bermudian business community and the Government for continuing to support and welcome us.”

He added: “We have a building, we have a vibrant staff of eighty people in Bermuda, including top management of the company, we have great infrastructure to leverage and we are totally committed to givng a helping hand to our community.

“We are here to stay.”

A further symbol of the company’s commitment to the island came when it celebrated the 150th anniversary of its foundation.

Bacardi commissioned a special time capsule encased in granite and cement and placed it at its headquarters on Pitts Bay Road.

The time capsule will not be opened until the company’s 200th anniversary in 2062.

And it’s an odds on bet a new generation of the family will be there to open it.

“

Today, staying in Bermuda makes perfect sense. As one of the highest profile companies on the island, we appreciate the Bermudian business community and the Government for continuing to support and welcome us.”

DECEMBER 2018 RG BUSINESS

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LEGAL

The living wage Can a rising tide really lift all boats?

BY JOHN HINDESS

The issue of a living or minimum wage is a complicated one. On its face, of course making sure that low income persons have enough to survive seems simple and easily supportable. However, the decision to enact legislation setting a minimum wage should be carefully thought through, researched and should definitely not be made in a vacuum.

The competing issues are complex and myriad. This article seeks to briefly highlight some of the unintended consequences that may occur from the

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implementation of a living wage which will need to be fully considered by the Government.

The intended purpose of a living or minimum wage is to

protect workers against unjustifiably low pay and to ensure that all can share in the fruits of progress, especially the poor.

This is a laudable goal but as many have said before, unless properly considered, the legislation can have unintended consequences that disproportionately affect those who such a law strives to protect.

Bermuda is a service economy meaning we do not have any industry or exports to rely on but derive our income predominately, perhaps wholly, from services such as insurance, tourism, legal and accounting. Those professionals engaged in such work in turn inject money into other service consumer based industries like restaurants and retail outlets.

An increase in the costs to employers in those industries will likely be passed onto the consumer, potentially making the cost of living in Bermuda even higher.

If an employer of a service industry business such as a restaurant does not pass these increased costs onto the consumer, it may well find other ways to cut costs that will negatively affect the lower end of our society. The first is obvious: they will hire less people or even dismiss some, leaving fewer workers to carry more of the load.

Other less obvious tactics that may be employed are cuts in benefits to workers.

The Health Insurance Act 1970 sets out the compulsory obligation of employers to provide a health insurance plan for their employees. It provides that the employer must give the most basic level of coverage known as the Standard Hospital Benefit. While the employer

must pay the premium, they can deduct 50 per cent of that cost from the employee’s wages.

The next level of coverage is the Hospital Insurance Plan which is the plan most employers choose to offer to limit costs whilst meeting their legal obligations. Then of course there are private health insurance plans which are not required to be offered under the law although presently a number of employers offer such comprehensive care. Will the implementation of a minimum wage result in fewer employers offering private health plans?

A simple, albeit unfortunate solution to off-set the cost of the minimum wage would be for employers to offer a cheaper alternative to the employee’s health coverage.

What about other cost saving measures employers may presently offer such as private long term or short term disability benefits? These are not mandatory under the law.

Cutting these benefits may be another way that employers can cut the increased cost of a minimum wage in order for their businesses to survive.

Employees would then have to live without adequate health insurance benefits or pay for it themselves, negating the impact of a minimum wage.

Although the Employment Act 2000 does not contain a minimum wage, it does provide for mandatory overtime pay unless parties expressly contract out of the requirement.

Under section 9 of the act, an employee who works in excess of 40 hours is entitled to be paid one and a half times his or her

Whatever your legal needs may be, Marshall Diel & Myers Limited can clear the way to achieve your goals.

Our team of talented and dynamic lawyers is committed to satisfying the needs and objectives of our clients by providing practical, innovative and effective legal solutions.

Our goal is to become trusted legal advisors to our clients.

Our clients recognise and value this.

31 Reid Street, Hamilton HM12, Bermuda T: (441) 295-7105 F: (441) 292-6814 mdm@law.bm

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living wage may therefore also impact Bermudian home ownership.

In short, it is not as simple as creating a required living wage. It must be done in conjunction with other social and economic policies and considering the prevailing legislation, otherwise it has the real potential to have the opposite effect of hurting those it intends to help. In this current economy where small business owners are already suffering and feeling the pinch of added and increasing taxes, this government must look at the whole picture and remember the old adage: a rising tide lifts all boats.

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